EU court rules second-hand sales of digital goods legal

CURIA, the EU's Court of Justice, has ruled that digitally distributed software should be valid for resale - a major blow for Steam, Origin and others.

CURIA - the Court of Justice of the European Union - has handed down a ruling in a software reselling case which, on the face of it, makes the resale of digitally distributed software officially legal throughout the EU.

The case of Oracle v. UsedSoft came about when the former company took exception to the latter reselling software licences - arguing, quite fairly, that the end-user licence agreement (EULA) under which the software was originally sold contained a specific term forbidding the licence from being transferred to a third party. UsedSoft, a far smaller company based in Germany, was reselling these licences to people who thought Oracle's pricing was set too high.

As with any other industry, second-hand sales are a serious problem for software makers. Each second-hand sale results in zero income for the rightholder, and it's far easier to argue that every second-hand sale represents a lost first-hand sale as, unlike retrieving the software for free through illicit means, the buyer is at least willing to part with some cash for the product.

The second-hand problem is one of the biggest driving forces in the move to digital distribution today. In addition to saving on production and distribution costs and cutting out the middleman for improved profit, digital distribution - with its in-built digital rights management (DRM) facilities and restrictive end-user licence agreements - effectively kills the second-hand market, forcing users to splash out if they want to buy the latest software or play the latest games.

At least, it did until now.

Ruling on the case of UsedSoft v. Oracle - case C-128/11 - CURIA has found that the so-called 'doctrine of first sale' applies to digitally distributed software just as much as it does its physical counterpart, upholding an earlier ruling by the Bundesgerichtshof (German Federal Court of Justice) in the case.

The doctrine of first sale is simple: when you sell your product to a user, you exhaust your right of distribution for that particular copy with the right transferring to the buyer. As CURIA explains in its ruling: 'A rightholder who has marketed a copy in the territory of a Member State of the EU thus loses the right to rely on his monopoly of exploitation in order to oppose the resale of that copy.'

Oracle, for its part, had argued that the doctrine of first sale does not apply to digitally distributed software as there is no physical product - just an agreement between the buyer and seller for the former to use the latter's product.

CURIA's response? Balderdash. 'The principle of exhaustion of the distribution right applies not only where the copyright holder markets copies of his software on a material medium (CD-ROM or DVD) but also where he distributes them by means of downloads from his website. Where the copyright holder makes available to his customer a copy – tangible or intangible – and at the same time concludes, in return form payment of a fee, a licence agreement granting the customer the right to use that copy for an unlimited period, that rightholder sells the copy to the customer and thus exhausts his exclusive distribution right. Such a transaction involves a transfer of the right of ownership of the copy.

'Therefore, even if the licence agreement prohibits a further transfer, the rightholder can no longer oppose the resale of that copy.'

The ruling is not only a blow for Oracle, but a major change in the way digital distribution services as a whole can operate. Currently, it's not possible to resell software purchased from Steam, Origin, or other digital distribution platforms - but CURIA's ruling in the case means that Valve, EA et al will need to add that facility into their system in order to continue to offer the services in the EU. It also means that digital distribution is no longer a solution to the second-hand market, taking away one of the biggest reasons for publishers to support the system.

In addition to full-version software downloads - including, we note, Microsoft's $39.99 upgrade offer for Windows 8 - the ruling would also affect downloadable content (DLC) for games. In the cases where a game is provided with a single-use code for add-on content - a common method for discouraging second-hand purchases of retail console games - publishers will now need to provide a means for users to transfer that content to a third party in the event of the game being sold.

The ruling does put some onus on the reseller to ensure that they are not breaking the law: CURIA states clearly that the seller must make the copy on his or her computer unusable at the time or resale or fall foul of the rightholder's exclusive right of reproduction. It's also not possible to buy multi-user licences at a discount and then split them into individual units, with licences needing to be sold in the same groupings as originally purchased.

Despite these mild restrictions, CURIA's ruling on the case is going to have a major impact on the EU-wide digital distribution market. Thus far, no digital distribution companies have commented on the ruling.

with steam , whislt the EULA says we are subscribers - they are selling lifetime subscriptions for the games they `sell` , therefore this ruling could mean you are free to pass along that lfietime subscription for said game

what steam should do is open a marketplace , where they take a cut from the games then resold.

I apologise for the tardiness of this story. Next time, I will be sure to dispose of the carefully-prepared 874-word analysis and simply provide a 24-word summary as per the linked OP. I look forward to the excess of newfound free time I shall have! :p

Originally Posted by Gareth HalfacreeI apologise for the tardiness of this story. Next time, I will be sure to dispense with the carefully-prepared 874-word analysis and simply provide a 24-word summary as per the linked OP. I look forward to the excess of newfound free time I shall have! :p

love the sardonic reply sir!

of further note - 2 observations- i wonder what would be in place , if the cd key is banned for cheating , in say COD , could it then be detached , transfered to a new account then started again as fresh?

also , with online DRM (say Diablo 3) how does this effect it? and will online DRM being resold be the next target?

An important consequence of this ruling is that Steam/Origin cannot back out by saying it's a rental agreement - if it's effectively a lifelong/perpetual rental, it's deemed to be equivalent to a sale and much be treated as such.

Valve will probably be smart enough to open a trading marketplace of their own, taking a cut of transactions and making millions in the process (heck, they've got rich from selling virtual hats).

Originally Posted by baddersI wonder if we'll see a "download charge" placed upon 2nd-hand sales, to offset the costs of distribution.

I've actually seen that, but I'm damned if I can remember where. I bought a game and it cost £19.99 (or whatever) as a download, with the proviso that I had to download it within a week (or whatever) of the original purchase date. After that, my unique download link went bye-byes.

If I hadn't wanted to keep the 4GB (or whatever) file hanging around just-in-case, I was given the option of paying £5 (or whatever) to extend the link's lifespan by three years (or whatever.) Sneaky.

(As you may surmise from the multiple 'whatevers,' my memory of the fine details is a trifle hazy.)

That could be a worry for Steam users, personally I like the fact that i don't need to litter my HD with multi-gb games which I might not play again, its reassuring I can just download it again in a few hours if I felt like it.

Were steam to go down that road it would certainly impact its utility.

If they were to charge non-original owners to download I can see it reducing the price of the used games to level where you wouldn't bother especially with the steam sales meaning some games have virtually no value to the user.

Originally Posted by Gareth HalfacreeI've actually seen that, but I'm damned if I can remember where. I bought a game and it cost £19.99 (or whatever) as a download, with the proviso that I had to download it within a week (or whatever) of the original purchase date. After that, my unique download link went bye-byes.

I think someone in that thread pointed out that they say we are subscribers, and subscribing to products, rather than buying.

Don't think is possible under UK law for them to allow us to 'BUY' it, then class it as a rental.
If they state the are subscribing it to us, then they are not allow to SELL a product, as to sell means to own.

Originally Posted by Gareth HalfacreeI apologise for the tardiness of this story. Next time, I will be sure to dispose of the carefully-prepared 874-word analysis and simply provide a 24-word summary as per the linked OP. I look forward to the excess of newfound free time I shall have! :p

I apologise for the brevity of my post. Next time, I will be sure to extend my web surfing break (whilst waiting for my experiments to run) and find my nearest Computer room to provide a carefully prepared 874-word analysis instead of a typed-on-my-mobile 24 word summary as i had done before. I look forward to the decrease in experimental productivity that i shall now be receiving! :p

I think its a good thing obviously, as 2nd hand sales are always good, but what's the difference in buying a 2nd hand game of someone that's a download to getting it off steam. I always used to buy new discs over 2nd hand as I never knew what the person before had done, but downloaded games wont have this problem.

Sounds like this could be a big ruling, and I approve of it in theory as someone who has always been willing to wait a few months and pick up games for a less ridiculous price.

In practice I imagine it will just mean more and more of these single use "bonus content" codes that come with new games, or potentially more release day paid dlc. The games industry is too much a part of the corporate world now to give up on any income stream without a fight.

Originally Posted by TrisIn practice I imagine it will just mean more and more of these single use "bonus content" codes that come with new games, or potentially more release day paid dlc. The games industry is too much a part of the corporate world now to give up on any income stream without a fight.

I don't think they'll be able to do that. Under this ruling you have the right to re-sell everything you buy, including dlc. So they can have day one dlc but they'll have to enable you to sell it on if you want to. It's also possible that they'll have to let you sell on your bonus content codes along with the game, depending on whether or not the bonus content codes are considered part of the first purchase.

Personally, I hope we see more of the GoG DRM free approach to selling games.

One of the first things that I thought when I read this is that companies like Valve and EA could stop "selling" games all together, and instead switch to just renting out their games (not lifetime rents like there are atm, but 1/2/5 year rents). Can't say I'd be happy if this is how it turned out.

On the flipside, there are loads of games in my steam account which I never play, and the only reason I still have them is that I can't resell them. It'd be nice to clear up that list a bit.

Finally, the court has recognised that when you purchase something, you have purchased something! Who cares if it's physical or digital, you've still traded money for it, and therefore should have certain expected rights to the product now in your possession.

Insofar as reselling digitally downloaded games goes I feel Steam and Origin would be rather off their rocker if they didn't implement a system wherein a user could "bundle up" a game bought through one of their systems into a large, singular installer file which could then be sold on. The game would still require activation through one of their systems, but the resold unit would not be eligible for download through the respective digital distribution system - this is a right held only for first-party buyers (much like a warranty on goods bought at retail). The used game seller would be responsible for the transfer of the file, and there is minimal loss (if any) financially to the distributors from this transaction, with the built-in provision that their incumbent DRM scheme is still there, doing it's thing.

This scheme would almost exactly replicate used goods sales as we have all become comfortable with over the past several thousand years, with minimal interaction or expense on the part of the initial distributor and an opportunity to advertise to new users via their digital distribution system (Steam and Origin). But more than likely we'll just see the wording of the T&C's changed in an effort to side-step the law and further strip away users rights :p

Ah ha! Now a year or two back I bought a CD copy of Valve's Half-life 2 Orange Box pack second hand of eBay. As most probably know (I didn't!) this requires activation via Steam by inputting a key code. But because the game was second hand...had already been activated (and despite the seller also giving me his username/password) I couldn't get the game to work.

An email to Steam garnered a reply stating that no, a new key would not be forth coming....quell surprisé!

This ruling would seem to indicate that Valve/Steam must either allow the existing key to work or provide a new key ....as I am [now] the legitimate owner of that particular copy of that game (imo I always was, it's just now the Law agrees with me).

Who wants to bet Valve/Steam still tell me to piss off when I email them asking for an activation!?

I can just see the price of 1st hand digital sales jumping up a notch as Steam/Origin figure that the only opportunity to make money from a game would be at first point of sale, so they may as well make the most of it.

My first thought on this obviously mirrored that of others in that it's simply a new revenue stream for Valve to exploit via a second hand market place in Steam or EA through Origin. I doubt I'm alone in being more than willing to fork out £10 - £20 for a copy of a second hand game on a console and used to the same on the PC back when bricks and mortar stores were still the primary means of games purchases.

At the moment they might shift a few copies via a sale but a second hand market place where they take their cut could be one hell of an earner if done right as well as keeping customers loyal to their platform because they want to rather than because they have to.

I apologise for the tardiness of this story. Next time, I will be sure to dispose of the carefully-prepared 874-word analysis and simply provide a 24-word summary as per the linked OP. I look forward to the excess of newfound free time I shall have! :p

It'll be interesting to see how this affects next generation consoles if they use in house global digital distribution.
Will they have to design that system so globally anyone can resell games, or will there be a special Euro version? Or will they do an Apple and insist on you using their payment system, then take a 30% cut.

enough most countries in europe are not ready for digital age (only sweden has a backbone internet rdy for blue ray size downloads )

to the person who mensioned how you sell your steam games

you cant its not possible and it requires steam orgin ect to put in the code to allow you to do it and id guess the court has given them a time to implement such a thing ( they give microsoft 3 years to remove internet explorer ) and id guess there will be a huge appeal about this from the main 7 it affects ( amazon google apple sony microsoft and valve / origin, They are the main resellers of digital media in europe )

Steam though is first and foremost just a reseller of other publishers games, valve have produced very few games in the last 10 years

half life 1 2 episode 1 2

team fortress and left for dead 1 and 2

that about it

you can pick up the lot in steam sales for about £15

EA have produced probably 3-500 in that time.

does this affect amazon, apple and andriod market places in europe as they are strictly speaking selling digital media which is what the ruling is about not just games. ( reading the ruling indicates it does )

expect a mass appeal agaist it by them or delaying it forever ( took ms 10 years to remove IE cost them 1billion in fines they made god knows what in that time id guess it was 100 + times the fine amount.)

Dout us as the consumer will see any immidiate change

Steam terms of service have not been updated niether has any of the 7 ive mensioned above

Originally Posted by MalvolioThis scheme would almost exactly replicate used goods sales as we have all become comfortable with over the past several thousand years, with minimal interaction or expense on the part of the initial distributor and an opportunity to advertise to new users via their digital distribution system (Steam and Origin). But more than likely we'll just see the wording of the T&C's changed in an effort to side-step the law and further strip away users rights :p

Then reduce first hand prices...

Thinking logically, for example of Steam, a user can download a game 60 billion times if they wanted, but what difference does it make if the user changes and the number of downloads doesn't?

I don't expect any real change from the end user perspective, the software industry has an army of lawyers ready to work around this.

However, if somehow this does end up having a huge effect, it's still naive to expect to be able to just transfer steam games and such in their current form. Most modern software benefits from additional services such as free patches. In the context of Steam there's also redownloading, stat tracking, cloud saves etc. All of that costs money to run, and if providing that to millions of people who don't cover the costs becomes unviable, it will be changed.

I see people in this thread expecting that Steam will just gift them a new key for a used copy of a game they bought. Maybe they will be forced to rework their business model to do that, but the transition wouldn't be straight forward. I'd imagine a Project Ten Dollar type fee to enable any steam functionality beyond simply having the key attached to your account.

Refund I can see Valve doing. Resale, Steam has no back-end to do it. I think the resale concept is fine, but Valve would need to have a reason to make it, and a court ruling wont do it. Maybe if Valve made 1 - 5% of the resale cost? I'd say thats reasonable.

Originally Posted by ssj12Refund I can see Valve doing. Resale, Steam has no back-end to do it. I think the resale concept is fine, but Valve would need to have a reason to make it, and a court ruling wont do it. Maybe if Valve made 1 - 5% of the resale cost? I'd say thats reasonable.

If they refund 50% of the cost then they will just inflate the initial price to cover that loss.

Originally Posted by steveo_mcgThat could be a worry for Steam users, personally I like the fact that i don't need to litter my HD with multi-gb games which I might not play again, its reassuring I can just download it again in a few hours if I felt like it.

Were steam to go down that road it would certainly impact its utility.

If they were to charge non-original owners to download I can see it reducing the price of the used games to level where you wouldn't bother especially with the steam sales meaning some games have virtually no value to the user.

They could do it for a nominal charge to cover any bandwidth cost, which must be at the most a few cents. They could let you (re-)download a game you've already bought (new or second hand) for (say) $0.25 - would anyone object to that?

I think there's a leap being made here that isn't necessarily reflected in the original judgment. I haven't read it, but the fact that the court ruled that UsedSoft's practice of reselling licences doesn't necessarily mean that Valve, Origin etc. have to change their practices or platforms to allow it to happen, only that if one user were technically able to transfer software to another, the law would be on his side irrespective of what the licensing terms said. It doesn't in and of itself require rightholders to modify their DRM to make it technically possible.

Secondly, I have no doubt this ruling will lead to more restrictive DRM and/or a shift towards a rental / service agreement style right to use software - if it is the permanence of the licence that means it must be transferrable, I expect software producers will switch to finite (though potentially quite long) terms. If they can switch people's mindsets, I'm sure they'd actually be delighted to rent their software to people, because it means smoother, longer term cashflow and an ongoing customer relationship which makes customers likely to license more software in future and to consider things like consultancy/support services, where software companies stand to make a killing - think Microsoft Software Assurance.

Originally Posted by mclean007I think there's a leap being made here that isn't necessarily reflected in the original judgment. I haven't read it, but the fact that the court ruled that UsedSoft's practice of reselling licences doesn't necessarily mean that Valve, Origin etc. have to change their practices or platforms to allow it to happen, only that if one user were technically able to transfer software to another, the law would be on his side irrespective of what the licensing terms said. It doesn't in and of itself require rightholders to modify their DRM to make it technically possible.

To the folk who are saying the games industries army of lawyers will get around this. MS has a much bigger army of lawyers and even they have to play ball with the EU, as does Apple and apparently now Oracle. The games industry isn't some special case.

This is pretty bad - at least with second hand cds people buy new because of CD damage risks etc... in the case of digital downloads there is no chance of any damage - so if a digital second hand version is going cheap why would anybody buy new :S

Im not worried about the cost to steam or valve, but to the indie developers who, via steam, have managed to actually get their games out there.

Originally Posted by BogomipThis is pretty bad - at least with second hand cds people buy new because of CD damage risks etc... in the case of digital downloads there is no chance of any damage - so if a digital second hand version is going cheap why would anybody buy new :S

Im not worried about the cost to steam or valve, but to the indie developers who, via steam, have managed to actually get their games out there.

Well if it did eventually happen it would kill off the Steam sales and the RRP would probably go up quite considerably to cover the loss.

so we will get a steam market place for second hand games, steam will charge a certain % for the sale, (30% with 10% going to the developer?) with the money for the sale being transfered to your steam wallet so only able to be spent on other games, also the second hand games will have a limited amount of downloads included in the sale (1-3 maybe), further 'support' for the game will then come at a cost for the second hand buyer, as the unlimited downloads is part of the subscriber agrement within the original sale and therefore more like a warrenty which will be non transferable

another option is of course the file compiler for the games in which the seller will be responsible for compiling the game and then uploading it to the buyer, no further support from Steam with this, with the idea that bandwidth/upload speed of the seller will limit the appeal, on top of the fact that once the buyer has got the file they will have to keep said file on their system or lose the game (anyone else thinking 25gb files for the game?) as the original 'owner' is not likely to keep the file on there system once sold and transfered

another option is of course set rental periods for the game being 25 year lease so you never own the game and are just renting it

Originally Posted by steveo_mcgThat could be a worry for Steam users, personally I like the fact that i don't need to litter my HD with multi-gb games which I might not play again, its reassuring I can just download it again in a few hours if I felt like it.

Were steam to go down that road it would certainly impact its utility.

If they were to charge non-original owners to download I can see it reducing the price of the used games to level where you wouldn't bother especially with the steam sales meaning some games have virtually no value to the user.

They could do it for a nominal charge to cover any bandwidth cost, which must be at the most a few cents. They could let you (re-)download a game you've already bought (new or second hand) for (say) $0.25 - would anyone object to that?

Again, there is no current bandwidth cost issue on Steam, why should that change just because the owner changes? If you move house, you don't need to pay to download the game again, if you reformat you can redownload the game free of cost.

I don't see why people are inventing this "need to cover lost sales" tosh. That is something bad publishers/developers complain about, not something Valve complain about, Gabe has stated that good service equals more sales.

Will we end up seeing everything go back to physical media again? No. But Bogomip's point above is valid - if there is always a second hand copy of any given game available why would anyone buy new? What would the advantage be?

Forget the big hitters - what about the small devs? They will see sales drop to almost zero as soon as second hand becomes an option, and their only source of income will be those who purchase "new" in sympathy/support of said developer. Looking at the average prices paid during the Humble Bundle type promos, customers as a whole will only spend the bare minimum.

Originally Posted by GlixAgain, there is no current bandwidth cost issue on Steam, why should that change just because the owner changes? If you move house, you don't need to pay to download the game again, if you reformat you can redownload the game free of cost.

I don't see why people are inventing this "need to cover lost sales" tosh. That is something bad publishers/developers complain about, not something Valve complain about, Gabe has stated that good service equals more sales.

the above is good until you think that the stats of average amount of time a game is redownloaded by the original owner are available and so easily accounted for in the original sale price.

unfortunatly if it is sold, there is pretty much a definate extra download going to need yo be include, plus any extra times they wish to download it, but what if that person then sells it, then the next person sells it and the next and the next - these are current unknowns and will have to be absorbed by the original sale by steam - so there will be a cost to steam in this way

Originally Posted by GlixAgain, there is no current bandwidth cost issue on Steam, why should that change just because the owner changes? If you move house, you don't need to pay to download the game again, if you reformat you can redownload the game free of cost.

I don't see why people are inventing this "need to cover lost sales" tosh. That is something bad publishers/developers complain about, not something Valve complain about, Gabe has stated that good service equals more sales.

It's not tosh, it will represent a huge drop in "new" sales for games, are Steam and the developers going to be ok with that? No they will maintain the profit levels and we will end up having to deal with the process they select to do that.

You really think that second hand sales won't change the way games are distributed?

Originally Posted by GlixAgain, there is no current bandwidth cost issue on Steam, why should that change just because the owner changes? If you move house, you don't need to pay to download the game again, if you reformat you can redownload the game free of cost.

I don't see why people are inventing this "need to cover lost sales" tosh. That is something bad publishers/developers complain about, not something Valve complain about, Gabe has stated that good service equals more sales.

Right now everyone who buys a Steam game pays Valve. Allowing used sales doesn't generate copies that haven't been paid for, obviously, but what it does is it reduces the total number of copies sold because the users make do with less.

Originally Posted by GlixAgain, there is no current bandwidth cost issue on Steam, why should that change just because the owner changes? If you move house, you don't need to pay to download the game again, if you reformat you can redownload the game free of cost.

I don't see why people are inventing this "need to cover lost sales" tosh. That is something bad publishers/developers complain about, not something Valve complain about, Gabe has stated that good service equals more sales.

It's not tosh, it will represent a huge drop in "new" sales for games, are Steam and the developers going to be ok with that? No they will maintain the profit levels and we will end up having to deal with the process they select to do that.

You really think that second hand sales won't change the way games are distributed?

Yup I really don't think it will as there was a time before these locked in accounts were in place and pc (and console) gaming grew even back then. Publishers got greedy is a better explanation.

Again, a lot of people redownload Steam games over and over, yet Valve don't have anything against it.

I think Steam are already in a good place to support this change, they have Steam Wallet and they have the ability to unlink games from peoples' accounts.

Example, I bought GTA4 for a fiver. I downloaded once and played it through. Then at a later date I did the same, now say I managed to sell it on instead of playing it again?

Where is the loss? There isn't any, if I wanted to play it again I would have to buy it which would mean I considered it a good game and would therefore mean I would never have sold it in the first place.

I'm glad that for once the European Court seem to be taking an interest in the selling of Software. Businesses have been given free reign with their EULA's for too long.

Originally Posted by GlixAgain, there is no current bandwidth cost issue on Steam, why should that change just because the owner changes? If you move house, you don't need to pay to download the game again, if you reformat you can redownload the game free of cost.

I don't see why people are inventing this "need to cover lost sales" tosh. That is something bad publishers/developers complain about, not something Valve complain about, Gabe has stated that good service equals more sales.

Right now everyone who buys a Steam game pays Valve. Allowing used sales doesn't generate copies that haven't been paid for, obviously, but what it does is it reduces the total number of copies sold because the users make do with less.

How does it reduce it? Explain!

It doesn't in the same way good games generate more sales, bad games do the opposite.

It's not supposed to be a con man's game, there are plenty of examples of this. MW3, BF3 etc

They claim to have sold very well, but selling well and actually delivering a good game that people play regularly are night and day.

I actually hate people with the attitude "suckers should have done their research to know if they'd like something or not before purchasing".

If gaming is an entertainment art form then there is no real way of measuring up a title and knowing you will enjoy it. Even demos can be mis-representative of a game.

Sorry Dragunov, not ranting at your post as such but just in general a bit taken aback when we finally have some clarity from a Court about our rights, and everyone starts thinking oh well the games companies will find a way to get more money out of me therefore it is the court's ruling that is wrong...

Originally Posted by longweightThe loss comes from the person who buys the game from you and not from Steam.

Also I don't understand how you can call their behaviour greedy?

The court ruling makes it pretty obvious, that they can't charge for something they have relinquished their ownership of, yet EA and co made up those Online pass and Once only usable codes for their games (ME3/BF3/DA2) just so they could effectively kill the 2nd hand market.

If I'm reading the court ruling right, even these codes now must be resalable as they are included with the purchase. :)

Originally Posted by GlixThe court ruling makes it pretty obvious, that they can't charge for something they have relinquished their ownership of, yet EA and co made up those Online pass and Once only usable codes for their games (ME3/BF3/DA2) just so they could effectively kill the 2nd hand market.

If I'm reading the court ruling right, even these codes now must be resalable as they are included with the purchase. :)

Please don't cut the username from a quote, it makes them hard to follow.

Originally Posted by GlixThe court ruling makes it pretty obvious, that they can't charge for something they have relinquished their ownership of, yet EA and co made up those Online pass and Once only usable codes for their games (ME3/BF3/DA2) just so they could effectively kill the 2nd hand market.

If I'm reading the court ruling right, even these codes now must be resalable as they are included with the purchase. :)

Please don't cut the username from a quote, it makes them hard to follow.

Why does that make them greedy?

Because now they have no right to withhold that bought and paid for service. :)

Well let's say Half Life 3 sells 100 copies. Then i want to buy a copy but instead of getting the 101st copy from Steam, i just grab one of the 100 that already exist for cheaper. There's no additional cost for Valve but their total sales figure is now 1% lower than it would have been if games were account-bound. There's no telling how big the effect would be on their revenue in practice, but if it's noticable they would probably look into tightening the belt.

This is actually turning out to be rather tricky to predict, for one thing Steam users have been trained to be thrifty so used copies should become extremely popular, but on the other hand i wonder how competitive the used market would be when Valve themselves have been doing 75% discounts. I guess Steam is a rather unique case and i should go back to thinking about the software industry as a whole.

Originally Posted by DragunovHUNWell let's say Half Life 3 sells 100 copies. Then i want to buy a copy but instead of getting the 101st copy from Steam, i just grab one of the 100 that already exist for cheaper. There's no additional cost for Valve but their total sales figure is now 1% lower than it would have been if games were account-bound. There's no telling how big the effect would be on their revenue in practice, but if it's noticable they would probably look into tightening the belt.

This is actually turning out to be rather tricky to predict, for one thing Steam users have been trained to be thrifty so used copies should become extremely popular, but on the other hand i wonder how competitive the used market would be when Valve themselves have been doing 75% discounts. I guess Steam is a rather unique case and i should go back to thinking about the software industry as a whole.

I'm trying to think of it as similar to TF2 trading. Makes things interesting. :D Buds anyone? :P

Originally Posted by GlixSay I bought your CPU from you? Both products usually become obsolete within a few years but still work. Same difference, why should there be any problem?

BUT a CPU is a physical product and therefore has a shelf life at which point it will no longer work and a new one has to be got, whereas a digital copy has NO shelf life, it will never wear out, it will never break, it will never get lost, and will therefore never need replacing because it will always be as good as new.

anyways personally i think Steam will adopt one of the four models i have guessed at above, however not sure which, but probably the first or third being the most likely in my mind.

one thing this could have a interesting impact on will be piracy, especially for music and video as people will pirate things more and blame it on being 'sold' the product in good faith or some such excuse 'sorry Mr lawsuite man, i didnt know it was a pirated copy i was downloading that you have caught me downloading, i thought i was buying a legal second hand version'

its any company that sells a digital product online with drm protection

pretty huge list of companies

amazon apple google been a major 3 as they all own online stores that sell digital products be it books videos music or games in application form which is still a digital product

Steam is a pretty small pie in the general scheme of things. apple and google have multi billion dollar businesses in the digital consumption area.

angry birds has sold more copys than steam has probably got in total game sales.

Is the Eu gonna press Google and Apple + amazon to make changes i wonder or will they target the small fry companies like shopto.net which probably has 1/million th of the total sales market if that but no major legal team to back them up.

Google apple and amazon can afford multi million dollar legal fights very few others can.

people assume steam and origin are the main targets of this but they are not really, They are small change in an otherwise huge market

apple google amazon are the big 3 and are probably close to 75% of all online digital sales.

itunes in 2011 was responsibile for a quater of all music sold in america they are making billions of dollars a year in sales.

steam had reported sales of around 500million dollars in 2011 ( apple amazon google make 1billion + per quater on there sales as they are published )

if you combine steam and origin ( the 2 big online game resellers ) they wont even 1 billion a year let alone 1bil + per quater.

not just games companys that sell second hand products

digital books second hand on amazon would be nice to see
second hand music for example
videos ect

Originally Posted by BogomipThis is pretty bad - at least with second hand cds people buy new because of CD damage risks etc... in the case of digital downloads there is no chance of any damage - so if a digital second hand version is going cheap why would anybody buy new :S

Im not worried about the cost to steam or valve, but to the indie developers who, via steam, have managed to actually get their games out there.

Well if it did eventually happen it would kill off the Steam sales and the RRP would probably go up quite considerably to cover the loss.

The big studios aren't going to take a hit on this.

I can't believe I had to read this many comments before people starting talking about this. I see a lot more downsides than upsides to such a possible change in the law.

Originally Posted by minimad127BUT a CPU is a physical product and therefore has a shelf life at which point it will no longer work and a new one has to be got, whereas a digital copy has NO shelf life, it will never wear out, it will never break, it will never get lost, and will therefore never need replacing because it will always be as good as new.

Games do have a shelf life, most software do, to pretend otherwise is absurd. Most old games no longer work and need adjustment before they can run on today's Operating Systems. So you can compare a digital game to a physical cpu. In fact it's not hard to find a 10 year old cpu that still works but try finding a 10 year old game that doesn't need patched/tweaks to get it to work.

GOG.com are a great example of proving there is a shelf life to games, because they are needed to bring a game back into a working state. It's also a plus that they don't use DRM. :)

its any company that sells a digital product online with drm protection

pretty huge list of companies

amazon apple google been a major 3 as they all own online stores that sell digital products be it books videos music or games in application form which is still a digital product

Steam is a pretty small pie in the general scheme of things. apple and google have multi billion dollar businesses in the digital consumption area.

angry birds has sold more copys than steam has probably got in total game sales.

Is the Eu gonna press Google and Apple + amazon to make changes i wonder or will they target the small fry companies like shopto.net which probably has 1/million th of the total sales market if that but no major legal team to back them up.

Google apple and amazon can afford multi million dollar legal fights very few others can.

people assume steam and origin are the main targets of this but they are not really, They are small change in an otherwise huge market

apple google amazon are the big 3 and are probably close to 75% of all online digital sales.

itunes in 2011 was responsibile for a quater of all music sold in america they are making billions of dollars a year in sales.

steam had reported sales of around 500million dollars in 2011 ( apple amazon google make 1billion + per quater on there sales as they are published )

if you combine steam and origin ( the 2 big online game resellers ) they wont even 1 billion a year let alone 1bil + per quater.

not just games companys that sell second hand products

digital books second hand on amazon would be nice to see
second hand music for example
videos ect

Originally Posted by GlixGames do have a shelf life, most software do, to pretend otherwise is absurd. Most old games no longer work and need adjustment before they can run on today's Operating Systems. So you can compare a digital game to a physical cpu. In fact it's not hard to find a 10 year old cpu that still works but try finding a 10 year old game that doesn't need patched/tweaks to get it to work.

GOG.com are a great example of proving there is a shelf life to games, because they are needed to bring a game back into a working state. It's also a plus that they don't use DRM. :)

you do rise a good point in this as far as games go, although i am not just on about games - an mp3 from 10 years ago will be the same quality as it was when it was ripped for example whereas a CD is likely to have stratches on it making it skip etc,

there are pluses and minus's to this but i think it is going to be more far reaching than any of us can comprehend at the moment,
and that companies such as steam will either
use it to make money from the sales (steam second hand market place),
find a way to bypass it (25 year leased games),
limit the usability of the second hand sale (limited download within the environment, making the ability to transfer the file between seller and buyer a barrier)

Originally Posted by GlixAgain, there is no current bandwidth cost issue on Steam, why should that change just because the owner changes? If you move house, you don't need to pay to download the game again, if you reformat you can redownload the game free of cost.

I don't see why people are inventing this "need to cover lost sales" tosh. That is something bad publishers/developers complain about, not something Valve complain about, Gabe has stated that good service equals more sales.

Quite. I don't think Valve is planning or should plan to charge for redownloads. All I'm saying is that IF they chose to charge a nominal fee to cover the bandwidth cost of redownloads (which they might choose to do if ever they implemented a game resale function, or else they'd take a cut of resale price), I don't think there would be many complaints.

Originally Posted by faugusztinBut you are unable to transfer an Oracle licence either.

By "can't", do you mean technically or contractually? The ruling states that contractual measures prohibiting resale are invalid, but (so far as I understand) it does not prohibit DRM based techniques intended to limit resale at the technical level. Since the company in question WAS reselling licences, it is clear that, if there was any technical limitation, they had found a way to circumvent it.

Originally Posted by mclean007Quite. I don't think Valve is planning or should plan to charge for redownloads. All I'm saying is that IF they chose to charge a nominal fee to cover the bandwidth cost of redownloads (which they might choose to do if ever they implemented a game resale function, or else they'd take a cut of resale price), I don't think there would be many complaints.

I also doubt we'll see it, but it would make sense. Currently games can be re-downloaded for free, but that's under the assumption that it'll only have one owner, they've likely recorded game download data, compared it with the cost of bandwidth and set the prices of their games accordingly with their profit margin allowing room for the average number of downloads.

With players being able to sell games there's a potential for the average download rate to increase and use more bandwidth. Valve would then need to compensate for this increased cost. A re-download fee would do it, but I doubt that'd happen. They'll likely just take the increased cost of a game over its lifetime and incorporate it into their pricing scheme.

EDIT: Also, before a mod gets to it, there's an edit button. Feel free to use it rather than triple posting!

Originally Posted by BazzDon't think is possible under UK law for them to allow us to 'BUY' it, then class it as a rental.
If they state the are subscribing it to us, then they are not allow to SELL a product, as to sell means to own.

Steam T&C will change

UK law is pretty flexible (I speak as a UK qualified lawyer - usual disclaimers etc. :-)) - there is no legal principle against a perpetual but non-transferable licence. Of course if the ruling discussed in the article is adopted in UK law, all that will change.

Originally Posted by SlothI also doubt we'll see it, but it would make sense. Currently games can be re-downloaded for free, but that's under the assumption that it'll only have one owner, they've likely recorded game download data, compared it with the cost of bandwidth and set the prices of their games accordingly with their profit margin allowing room for the average number of downloads.

With players being able to sell games there's a potential for the average download rate to increase and use more bandwidth. Valve would then need to compensate for this increased cost. A re-download fee would do it, but I doubt that'd happen. They'll likely just take the increased cost of a game over its lifetime and incorporate it into their pricing scheme.

EDIT: Also, before a mod gets to it, there's an edit button. Feel free to use it rather than triple posting!

I'm familiar with the edit button, having been a member here for 10 years, but I don't see any issue with triple posting when replying to multiple comments. I could multi quote, but it's a massive hassle on a phone and you end up with posts a screen long. I feel that multiple posts addressing each point in turn are more digestible.

To address the on topic issue, I think you're probably right that Valve is unlikely to introduce a redownload charge. The bandwidth cost of even a large game must be trivially small compared to game prices, so I really doubt the small increase in bandwidth use that a resale mechanism would generate will move the needle enough for Valve to adjust pricing structures at all. But I do think if they implement a resale marketplace mechanism it would be very reasonable and indeed likely for them to expect a cut. My guess would be somewhere between 10-30% (NB not directly comparable but Apple takes a 30% slice of App Store sales, so there is a precedent)

This will never apply to online passes as those are either rental agreements or subscriptions. You are literally paying for Online access and not for the game, i.e the ability to use the SERVICE that their servers provide.

As some as are suggesting that you own the 1's and 0's that you download Steam et al could turn around and say that you have to sell your copy, there is no option to download from Steam again as that would be counted as a new purchase.

I don't fancy having to upload 30GB of game to make a few pennies back!

There's a fundamental problem with this law. Whether it works for games or not is one can of worms which is being heavily discussed. As others have already pointed out however, this would cause huge problems for the sale of other digital product.

Games and software are unique in that they work via interpreted code. If part of that code instructs the program to verify whether it is legally owned or not, it cannot be used without being either properly licensed or otherwise hacked or cracked. This is a reasonable safeguard, since the software companies could find a way to easily disable your original software once it has been sold and enabled elsewhere. While this is never 100% safe (as a person could back up their copy of the software and apply a patch/hack/crack/fix if one exists in order to retain the title after it is sold), distributors and creators of such patches/hacks/cracks themselves would face possible prosecution for making these illegal files available, and it's usually beyond the average person's ability to create such a fix themselves without online aid.

The problem with audio, video and e-books is that the interpreter is 'you' and not some processor.

Let's look at the most basic of these, the e-book. There's nothing stopping you manually copying the e-book word for word into a seperate Notepad window, that goes without saying if the e-book is pure text. Depending on the security, viewer application and DRM that is used, you may be able to print out a hard copy, take screen grabs with the PRINT SCREEN button.

Audio is a similar situation, since anything that can be heard by human ears can be 'heard' by electronic ears too. If you're not too concerned over high quality (for example if you just want a copy on a mobile phone as a ring tone or something), no DRM in the world can detect whether a mobile phone's microphone is nearby and 'listening in'. Likewise, regardless of the protection and compression, the audio MUST be completely raw and unprotected by the time it hits your PC speakers or audio outputs or your speakers would just produce garbage. No DRM in the world can tell the difference between a pair of headphones and a wire linked up to the microphone socket of a recording device. Or your AUDIO-OUT being linked to an AUDIO-IN for that matter.

And video... I'm not entirely sure how folks do this but I'm assuming for now that methods exist purely because folks are able to capture HD video output from their PC or games console and have been able to do so for a while. This tells me that there's a similar 'weak link' in those setups. Since the consoles lack any kind on inherent video recording ability, this means that the footage is captured live as it's decoded and displayed frame by frame on the television screen through external methods. Failing any other option, a person could still point a video camera at their television screen if they were determined enough.

I've gone on way longer than I'd expected, but I can't see how it's possible to 'transfer' ownership of digital medium to another person, since 'transfer' involves the original owner giving up his rights and ability to use or access the digital medium which would be simply impossible to prove in many cases. The way I see it, it's way too easy to retain a copy, meaning that such a law-change is likely to get mainly abused by those who see the obvious pirate potential.

Pirating is a problem. It's costing us all. It's not the end of the world situation some might claim, but it's bad enough how it is at the moment. What you have to consider is that currently, the only people who actively pirate are those who are brave (or stupid) enough to risk the consequences, or those who believe they can outwit the system by concealing themselves through network protocols. The brave and stupid ones have only gotten away with it so far because or pure luck, the ones who use onion routers and proxies may one day wake up to find their technology has been compromised and the FBI at their front door.

What happens when something can be easily obtained legitimately, secretly copied in private easily, and then either sent back for a full refund, traded in or resold for a (slightly) cheaper price?

Think back to the 80's. VHS videos, audio cassettes and Spectrum games. How many people know folks who rented videos and copied them simply by hooking one VCR into another and recording the output? Folks who copied audio cassettes by using a dual-cassette recorder and 'taping' one to the other? Folks who did this exact same thing with Spectrum games?

Those things I described were all illegal. They were what was 'pirating' of the 80's - yet how many people got prosecuted? The problem was, it was totally unpolicable. Without any kind of evidence that a crime was being committed, folks were free to duplicate to their heart's content. Entire neighbourhoods would share without any real deterrent. While internet piracy is indeed rampant - the act of (for example) downloading from a torrent site is a much more public activity that leaves tracks and evidence all over the internet to be pieced together if the authorities decided. The prospect that they 'may' be prosecuted is a piracy deterrent for many.

Now I see some comments around the net about this not really being a problem, as each copy is initially paid for so the publisher always gets paid for the initial purchase regardless - but there is a huge problem. Think of it this way: Person A buys an MP3 album, copies it and sells it on for just under full price. Person B buys the MP3 album off Person A, the money basically serves to refund Person A who now not only still retains a copy of the album but has also gotten his money back. Person A then uses this money to buy a different MP3 album, which he copies and then sells on...

Looking at this situation closer, for each album that is bought, copied and sold, Person B becomes the 'true' owner. It is almost as if that person bought the album and then loaned it to a friend who promptly copied it and then gave it back. Not only that, but Person A happens to know every person in the neighbourhood and they each let him copy one of their albums. We're back to the 80's and audio cassettes, only 'loaning' from strangers rather than close friends and family.

It was unpolicable then, it will be unpolicable now. While it's the nature of the beast that there will always be pirates, it's definitely no good thing if people suddenly develop a taste for piracy due to the temptation of being able to conduct it in the privacy of your own home without leaving evidence or tracks on the internet like the days of old.

With these medium especially, it will be impossible to even begin to guess how much this additional pirating will be taking place and so there's only two possible solutions from the publishers: a hefty estimate of losses resulting from both legitimate and illegitimate uses of the legislation and a massive price hike as a result, or, finally, a return to a physical medium using a proprietary disc format as the main distribution format.

Originally Posted by longweightAs some as are suggesting that you own the 1's and 0's that you download Steam et al could turn around and say that you have to sell your copy, there is no option to download from Steam again as that would be counted as a new purchase.

I don't fancy having to upload 30GB of game to make a few pennies back!

I believe, to comply with the legislation such a feature would have to be provided somehow. Don't forget, it's your right to use the software that would be sold, not the software itself. Companies also wouldn't enjoy people selling 'faulty', 'modded' or 'infected' software that would damage their reputation. If they're going to make second hand sales available, as advertising for their company if nothing less they will need to control the process themselves.

This whole post is wrong but might be funny or interesting to read so I'll leave it. :D

Whole lot of good points there Pobatti & I have a solution, not perfect but it never could be really even with the current model without 2nd hand coming back to PC.

Here's my take on this silly law.

Why just EU & not the whole world? plus I thought up a better idea than whatever nat brain made this one up since seeing this weird news.

I'd prefer if a 30% cash back as a credit note wallet that isn't giftable in any way & requires an extra security measure that has to be used every time you use it to cash in your unwanted games in case you get hacked & some dude thinks it's funny to clear out your awesome collection, & same for movies, tv shows & music & you can only spend at the place you bought from & at the price you bought them for so you don't get people who bought a £30 game in a sale for £2 & get £7 more back than what they paid lol.

Could be done for professional applications also but if going that way you get no support other than updates, fair deal IMO.

As far as I'm concerned places like steam working with the publishers have been really generous on the sales & then you get some fool who doesn't understand the system make up a stupid law like this which who knows what that might cause in the long run, can't see good coming from it, I really can't, an option to leave your steam collection or the like in a will perhaps yes, that does make sense.

I also think it's very fair to say things like nat brain, idiot & fool about this decision. :)

Retail games registered on the service not allowed, multipack games not allowed unless getting rid of the whole collection included in the multipack at that time as they have ones added each time usually & same rule of 30% of what you paid which wouldn't be an option to many if they already had a few games from the collection which is a common thing.

2nd hand games are as damaging as piracy really because the creators & publishers don't see a penny of those sales so does hurt the industry & makes unrelated ones profit like vultures, the PC had something special when the 2nd hand market died out, if or when this badly thought through 2nd hand system takes effect it won't be good for PC gamers, especially the ones who support good games while they are full price who are really keen gamers, without those there would be no PC gaming anymore, something for the hardcore sale seeker to realise.

I see less reason for developers to support PC with a stupid law like this coming back, wasn't law before but publishers came up with a good idea to end the 2nd hand games market, just like EA introduced a fee if you want the multiplayer part on their console games for compensation of the loss of a sale, I'm not an EA fan but that really is a good move IMHO, without deterrents things fall apart fast.

That thing of having a multiplayer part in a game is what would have made a lot of great single player games feel the need to have a multiplayer part which is a waste of funds for a great single player game that could have gone into more story of the game. :'(

With not being financially well off I should be feeling like this is totally awesome news but I'm not feeling that at all about this news, I believe in supporting the companies & awesome talent who make this entertainment in an otherwise kinda dull world, especially in cities, nature is & always has been awesome but cities, m'eh & I mean that.

Posted picture evidence isn't on topic, unrelated to 2nd hand sales lol it's even dated July 2011. :) Not only that but the messages on that picture are precisely the same as it's always been when refunds are done on steam other than the member doing the request adds some UK law that doesn't get acknowledged by the steam op & no a refund wasn't acknowledgement because I've seen the same thing many times but without the UK law bit. :D

Waynio, you see only one side of 2nd hand market. But you completely miss the other side of the 2nd hand market... You bought a brand new game for the typical new game price of €50. Now, half year later the game is usually sold let's say for 30€. To be able to sell your used game, you will sell it for 15-20€. Sure, the publisher "lost" 30€ sale now, half year later after the game release. Except most times what will you do with the money you got from 2nd hand sale ? Sure, it is not 100% that he will use the money for that, but he will now have part of the money for another brand new game. Without it, he will not buy the brand new game, because he has no money for it, but thanks to the 2nd hand sale, he can.

faugustin, guess I had a bit to say :D you are right about me seeing half, must have been the influence of the heavy piracy note from the new poster I seen. :) probably one of those smart jedi mind trick lawyer moves we've heard about.

Good swift argument & I see both sides clear now, case closed really, thanks for that extra point. :)

I take that back about any insults of nitwits, idiots or fools & stick them on myself & feel dirty & scrub them off so I'm clean again. ;):)

I added that in there for whatever it is you pay at the time including sales & I missed adding price drops on purpose, think it would be good for a 30% as a loyalty thing for the ones who make games a success initially because without those the whole system would fall hard & there wouldn't be good enough reason to make big budget games anymore & it would be back to oldschool games like the rise of the indy devs which are very often very awesome but yeah we don't buy nice GPU's for those. :)

2nd hand could hurt PC gaming a bit still though but not as bad as I pictured, my solution is if I can't afford it or I haven't got time to play it at release I pick it up in a sale to play when I can.

Got used to if I buy a game I don't like then that's that, can't even remove them from my list for free.

I say it again though so it's clear.

I take that back about any insults of nitwits, idiots or fools & stick them on myself & feel dirty & scrub them off so I'm clean again. ;):)